Addressing the rise in long-term sickness could unlock £57bn windfall, research shows
The next government could receive a £57bn fiscal windfall if it succeeds in reversing the recent rise in long-term sickness, new research from Boston Consulting Group (BCG) and the NHS Confederation suggests.
Reintegrating between half and three-quarters of those who have dropped out of the workforce since 2020 could generate anywhere between £35bn and £57bn over the next five years, the analysis suggests.
It could also help deliver a three per cent lift to UK GDP, worth around £177bn, by the end of the parliament.
The research reveals the size of the prize awaiting any government that can succeed in getting a grip on Britain’s long-term sickness crisis.
The pandemic has had an unusually big impact on Britain’s workforce compared to other major economies. Economic inactivity has increased by 900,000 people since 2020 with long-term sickness the cause for 85 per cent of this increase.
This means the UK’s inactivity rate has increased by 1.1 percentage point since the pandemic, bucking the trend among rich countries. On average, OECD countries have seen inactivity fall by one percentage point while EU countries have seen a 2.3 percentage point fall in inactivity.
The rise in long-term sickness is most prevalent among 18-24 year olds and 50-64 year olds. The increase among the younger age group was “both surprising and concerning,” the report noted.
Musculoskeletal and mental health issues account for around 50 per cent of all those reported by the long-term sick. Mental health conditions have been steadily rising since 2017/18 and remain the most reported condition among both 16-24 year olds and 25-49 year olds.
Raoul Ruparel, director of BCG’s Centre for Growth, told City PM that the next government needed to take a “different perspective” to solve the issue.
“There are some problems that require more cross-governmental work,” he said. “The main point is you need to look at some of the root causes of this and the wider social determinants of health beyond clinical care”.
The report recommended that the Prime Minister should make improving health outcomes a cross-government priority and establish a new Health Improvement Board to help drive this through.
Ruparel said early interventions across a range of different policy areas – such as housing and education – would be essential to improving health outcomes.
“These are the kind of early interventions that are needed to try and help people before they deteriorate to the point where they have to drop out of the workforce. They need more joined up action across departments,” he said.